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  • Writer's pictureBy The Financial District

South Korea Discovers Illegal Stock Short Sales By 9 Banks

South Korea's financial watchdog has disclosed the uncovering of breaches in short-selling rules by seven additional banks operating in the domestic stock market, as reported by Jihoon Lee for Reuters.


Among the scrutinized banks, Credit Suisse AG received a notice indicating potential fines of 50 billion won for alleged breaches of short-selling regulations. I Photo: Ank Kumar Wikimedia Commons



Following a ban on short selling introduced in November, prompted by illegal trading by two foreign firms, the Financial Supervisory Service (FSS) initiated a thorough investigation into trading practices across various banks.


The interim investigation findings revealed violations by a total of nine banks, amounting to 21.2 billion won ($154.76 million). While two banks have already faced penalties, the remaining five are under investigation.



Among the scrutinized banks, Credit Suisse AG received a notice indicating potential fines of 50 billion won for alleged breaches of short-selling regulations, according to South Korea's Chosun Ilbo daily.


The Capital Markets Act in South Korea prohibits "naked" short selling of stocks, which involves selling shares without proper borrowing or confirmation of availability.




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